Consider the three stocks in the following table. Pt represents the price at time t, and Qt represents
shares outstanding at time t. Stock C splits two-for-one in the last period.
15. What must happen to the divisor for the price-weighted index in year 2 (t=1 to t=2)? A. Stays the
same, divisor is 3 B. Stays the same, the divisor is 2.34 C. Must be adjusted, the divisor is 3.2 D. Must be
adjusted, the divisor is 2.34 E. None of the above choices is correct
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